There's essentially a basic skill level in this game, sort of like hearthstone. Once you reach that level, there's really nothing in the game they can throw at you that's difficult. And it's usually gear that's really holding you back because you haven't squeezed every bit out yet. I haven't felt "challenged" by any of the pve content in this game in a looooong time. Unless they some how switched the mechanics drastically (which, the way they redid some of the classes, might be this expac actually), I don't really see how pve content will ever "challenge" me. The challenge was always the synchronization of your raid to execute, not the encounter itself. Knowing your rotation inside out doesn't take much effort.
There are other "challenges," though, like total mastery of your character. I remember when that warlock soloed heroic lich king. That was a great mastery of the game and mechanics.
Pvp for me is the only challenge in the game because another player is always dynamic and not scripted. The random situations that arise are very enjoyable, and it really takes thinking outside the box sometimes to overcome another player, not just knowing the basic branched paths for your rotation. When Laintime dropped his warrior pvp video we were all like omgggggg at how he played out situations we'd been in but never thought to play like that.
The bolded is a very important part of my point. You don't always have the gear, or maybe there's still people in the raid that aren't quite cut out for high-end progression, or whatever. Gear makes it easier, but most of the time, you're not stuck on a boss because you don't have the gear - there's something either you or someone else can do to clear that hurdle.
The dynamism in raids(as opposed to the dynamism in PvP) comes from the fact that there's 24 other people there, and things do go wrong. It's why I've always played a healer - tanking generally bores me, dps generally bores me, but with healing, there's always those moments of chaos where I could try and pull the party/raid back into the fray. I played shaman, so there was always somewhere I could put my abilities to keep things in control, so I was always on top of kiting duty, purges, interrupts, etc. It was also a time where mana management was a skill dynamically affected by the needs of a raid on any particular attempt.
I'm not saying that raiding is rocket science, but even when I felt like I was at the top of my game, I was continually finding things I could do to push a little further, especially in an age where people were just starting to find EJ and even those boards hadn't really math'd everything out like it is today.
Sure, there's a basic skill level that makes the game fairly easy, but that's not enough if you're truly interested in mastery.
Also, PvE raiding and PvP require completely different skill sets. I was a decent PvPer back then - ~2k rating during seaons 1 and 2 in both 2s and 3s with a spec that was generally considered poor for PvP, but I never really pushed it the way I did raiding because it wasn't really my thing. On the other side of the fence, I've known phenomenal PvPers that are absolutely lost even in very simple raids.